Taxing internet returns

Inland Revenue mascot Hector says: Don't just pay tax, pay e-tax

The government wants tax payers to hand in their "self assessment" tax returns online, but as BBC News Online's Tim Weber reports, that's easier said than done.

Do your tax return on the computer, send it to the tax inspector online, and Gordon Brown will give you a £10 reward.

The Inland Revenue ...

processes 9m self assessment forms

expects 300,000 returns to be filed online

registered 75,000 tax payers for online returns by August

received 8,000 returns so far

That is the Inland Revenue's hard sell for its "e-tax" service.

I'm not one to pass up the offer of a tax discount, and immediately registered for the service on the Inland Revenue's web site.

But where to get the electronic version of the tax return?

Where is the software?

It turned out the form is only available on a CD-Rom. You can not just go to the site and download it on to your computer.

That is promised for the near future, but there is a deadline looming. The Inland Revenue calculates the tax for you only if you submit your return before 30 September.

However, online ordering of the CD with the electronic tax form was not possible either.

Hector helped me to save money - not time

I had to log off and call the orderline to get the free software package - only to find it was not available.

The Inland Revenue recently abandoned its own "Electronic Version of the Return". As a quick fix, it is offering a customised version of Microsoft's 'TaxSaver 2000 Lite'.

"We will be able to send out the software in July", I was told, giving me plenty of time to sort out my simple tax affairs.

Hector's turn

The CD-Rom arrived as promised, and installing and launching the software was easy enough.

I was mildly irritated when Hector, the Inland Revenue's cartoon character, popped up to "interview" me, but I duly proceeded to answer his questions.

Most of them were quite straightforward.

Others gave pause for thought: "Do you want to edit your employment details now"? Why would I want to edit them?

What Hector really wanted to say was: Please tell me now how much tax you paid last year on your salary!

I answered questions, filled in the blanks. But let's face it: computer screens are not ideal to handle elaborate forms, especially when HM tax inspectors are not renowned for using plain English.

Hector saves me

As I plodded my way past post-cessation expenses, pre-incorporation losses and transitional allowances, I missed a beat when I should have ticked the box for the married couple's allowance.

But Hector and his Tax Saver Lite came to the rescue.

Cunningly he had already asked me whether I was single or married. When the software checked my tax return for errors, it told me to apply for the married couple's allowance.

Finally, my tax return was in order, and even better, I was told I had paid too much tax and would get some money back.

Hector abandons me

Just one more thing to do: Click on "Internet filing" and submit the return.

Not so fast! All I was offered was a link to a Microsoft web site selling lots of tax-saving software, and a link to "register" for online filing.

But I already was registered!

I went through all the menu options, scoured the help file for advice on how to submit my tax return. Searched the tax booklets, everything that had come with the software.

Nothing - and too late in the day to ring the help line.

So I went online and searched the Inland Revenue web site.

"Click here for the service" - I clicked, I logged on. Nothing again, no explanation, no pointer on how to file the return.

The "Help" button provided lots of unhelpful advice, but no clue.

Logging off, searching the software again, back online, searching the website.

Twenty minutes later I stumbled across a help file with "Frequently Asked Questions".

The quest for the iFile

There I was told to "Open the iFile". The what?

And then, the crucial sentence: "You can use TaxSaver 2000 Lite to complete and send your tax return to us over the Internet using the TaxSaver iFile utility..."

The Inland Revenue had sent me the car but not the wheels. Without the iFile programme, the TaxSaver Lite was virtually useless, at least for online tax returns.

It took me 20 minutes to download the programme.

And still I could not file my tax return. The iFile programme refused to load the document.

See, the hard copy tax return uses the national insurance number as "tax reference", while the online form ignores this number. Instead it insists to get an eight-digit number labelled "official use" on the hard copy.

This time, the help file did help and I swapped the numbers.

Another attempt to log on. The modem springs into action, it works, it works ... it doesn't.

"Error 550, Box 1.2 ... allows a maximum of 28 characters...".

Where is box 1.2? I give up.

When I ring the helpline the next day, I am told that I made the mistake to faithfully copy the details of my tax notice.

There my employer is called British Broadcasting Corporation. That's 30 letters and two spaces, too long for the Inland Revenue's online form.

Tonight I will give it another try to file my tax return. I've still got 40 days left to meet the deadline and earn my tenner.

Now how long did I work for that money?

Update:
I tried to file again, only to receive yet another error message: "Box in Error:18.3 - Error Code:492".

When I ring the help line I am told that this is a "software bug" experienced by quite a number of tax payers.

The Inland Revenue has told me to sit tight and not file my tax return until they get in touch with a software patch.